Chesapeake Energy to price $1.25 billion two-part senior notes in Tuesday drive-by

By Paul A. Harris

Portland, Ore., Sept. 25 – Chesapeake Energy Corp. plans to price a $1.25 billion two-part offering of senior notes (expected ratings Caa1/B-) in a quick-to-market Tuesday trade following a mid-morning conference call with investors, according to market sources.

The deal is coming in tranches of six-year notes, callable after 2.5 years at par plus 50% of the coupon, with initial talk in the context of 7% to 7¼%, and eight-year notes, callable after three years at par plus 50% of the coupon, with initial talk in the context of 7¼% to 7½%.

Tranche sizes remain to be determined.

Goldman Sachs & Co. LLC is the left bookrunner for the public offering. J.P. Morgan Securities LLC, Wells Fargo Securities LLC and MUFG are the joint bookrunners.

ABN Amro, BMO Capital Markets, BofA Merrill Lynch, Citigroup Global Markets Inc., Credit Agricole CIB, DNB Markets, Mizuho Securities, Morgan Stanley & Co. LLC, Natixis and RBC Capital Markets LLC are the senior co-managers.

The Oklahoma City-based oil and gas company plans to use the proceeds, together with cash on hand and borrowings under its credit facility, if necessary, to repay term loan debt, with any excess proceeds to be used for general corporate purposes, which may include debt repayment, including its second-lien notes.

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